SOLS Sollensys Corporation (CE)

Item 1.01. Entry into a Material Definitive Agreement.

On October 26, 2021, Sollensys Corp (the “Company”) entered into that certain Merger Agreement (“Merger Agreement”) by and among (i) the Company; (ii) S-CC Merger Sub, Inc., an Arkansas corporation and a wholly owned subsidiary of the Company (“S-CC Merger Sub”); (iii) S-Solutions Merger Sub, Inc., an Arkansas corporation and a wholly owned subsidiary of the Company (“S-Solutions Merger Sub”); (iv) Celerit Corporation, an Arkansas corporation (“Celerit”); (v) Celerit Solutions Corporation, an Arkansas corporation (“Celerit Solutions”); and (vi) Terry Rothwell (“Shareholder”).

Pursuant to the terms of the Merger Agreement, on the closing date, (i) Celerit will merge with and into S-CC Merger Sub, with Celerit surviving, (ii) Celerit Solutions will merge with and into S-Solutions Merger Sub, with Celerit Solutions surviving, and (iii) the Shareholder will receive from the Company certain cash consideration and other consideration as set forth in the Merger Agreement (the “Merger”), on the terms and subject to the conditions set forth therein, including but not limited to payment by the Company of (a) the sum of $4,440,000 in cash, and (b) 3,000,000 shares of the Company’s common stock.

Celerit, together with its affiliate Celerit Solutions, are an IT services business with a world class customer success department serving the financial sector since 1985. The Merger is being effected to further the Company’s mission to create a safe and immutable environment, in conjunction with Celerit and Celerit Solutions, for the future of banking.

Pursuant to the terms of the Merger Agreement, the Company expects to enter into a Purchase Agreement (“Purchase Agreement”) by and among (i) the Company; (ii) CRE Holdings LLC, an Arkansas limited liability company (“CRE”); and (iii) Terry Rothwell and George Rothwell, the sole members of CRE (together, the “Rothwells”). The Company expects that the Purchase Agreement will stipulate the terms of the acquisition of four real property parcels owned by CRE, as well as one real property parcel owned by the Rothwells, for a total purchase price of $5,560,000 (the “Real Estate Acquisition”). Included within the combined five real property parcels are Celerit’s and Celerit Solutions’ administrative offices, data center, as well as three vacant land parcels.

The Merger Agreement includes customary representations, warranties and closing conditions.

Neither the Merger nor the Real Estate Acquisition have closed yet, however pursuant to the terms of the Merger Agreement, they are expected to close substantially simultaneously.

The foregoing description of the Merger Agreement is qualified in its entirety by reference to the Merger Agreement, filed as Exhibit 10.1 hereto, which is incorporated herein by reference.